BANKING | Some 551 Equity Bank-Kenya account holders had a field day at the automated teller machine (ATM), withdrawing up to KShs179,677,736 (about Shs5.2 billion) in fraudulent transactions.
The bank is investigating suspicion of syndicated fraud, or swiping by hackers.
Detail of the alleged fraud is contained in a new red flag that Equity Bank-Kenya general manager for security and investigations, Mr Gerald Munyiri, sent to the Director of Banking and Fraud Investigations on Monday, April 15.
Mr Munyiri told the Kenyan bank fraud unit that the transactions were done between Tuesday April 9 and Monday April 15.
He asked for the fraud unit to further investigate “with a view of apprehending and prosecuting the perpetrators”.
The scandal in Kenya followers that of its subsidiary in Uganda, hit by a Shs65 billion fraud in stock financing and agent float financing portfolios.
At least seven people, including Equity-Uganda staff, have been charged in court for their alleged roles in the fraud, while Mr Kenneth Onyango, former executive director for commercial banking, was also arrested but released on police bond.
This website has contacted Equity-Kenya for a comment on the letter that has since been shared widely on social media.
But a Kenyan website, Kawatungu, is reporting that detectives on Tuesday arrested 19 suspects over the massive debit card fraud.
“The suspects were rounded up by the Directorate of Criminal Investigation’s Banking Fraud Investigation Unit,” the website said.
“They were taken for grilling ahead of planned arraignment and recovery.”
Upsurge in ATM withdrawals
Munyiri said that early on Monday, the bank’s risk department noticed an upsurge of transactions emanating from the banks MasterCard GL.
“Preliminary investigations had revealed that Ksh179.6 million was paid out fraudulently to the 551 Equity Bank accounts,” he said, indicating that the transactions were carried out within six days – starting last Tuesday.
The flagged transactions included KSh63,023,983 (about Shs1.8 billion) sent to Safaricom Mpesa and KShs39,047,344 (about Shs1.2 billion) to 11 commercial banks.
“We are in touch with Safaricom and the respective banks to assist in tracing the movement and safeguarding the funds,” Munyiri said.
Equity-Kenya said it had liened KShs60,733,087 in the 551 accounts.
A lien provides a creditor with the legal right to seize collateral asset of a client.
The Equity Bank Kenya Limited is wholly owned by the Equity Group Holdings, which has a customer base in excess of 14 million in six East African countries.
